how stamp duty is calculated

how stamp duty is calculated

how stamp duty is calculated for Condo In Singapore

It is not easy to buy a property in Singapore. The Property Market is highly competitive and prices have risen fast over the past few years. However, buying a property does come with many benefits. Possessing your own house gives you an opportunity to decorate it as you like, and also gives you the freedom to give it an upgrade whenever you want.

Besides, having your own property can help secure your savings for retirement or fund your child’s education. Again, buying a Condo comes with its own set of challenges too.

You need to factor in the cost of purchasing the unit, maintenance fees, resale value and stamp duty before making up your mind on whether this is the right thing for you.

Read on to know more about how Stamp Duty is calculated for owning a Condo unit in Singapore:

How Stamp Duty is Calculated for Condo Owners in Singapore

The cost of owning a property in Singapore is not an easy decision. It is more important to know how much the stamp duty will be on your property before buying.

Stamp duty is calculated based on the type of property you are purchasing and its purchase price. The following are the different types of properties, with their respective rates for stamp duty:
For example, if you buy a residential flat with a purchase price of S$2 million and  you will have to pay BSD $76,600.

If  bought a private property at a market valuation of $2,300,000 and at $2,000,000 purchase price. Since the valuation amount is higher than the purchase price, stamp duties are to be calculated at $2,300,000:

Method 1: Buyer Stamp Duty (BSD) calculation (Easy Way)

Purchase Price (PP) / Market Value (MV)BSD Formula
Less than $1,000,000[0.03% * (PP or MV] – $5,400
More than $1,000,000[0.04% * (PP or MV)] – $15,400

($2,300,000 * 4%) – $15,400 = $76,600

Method 2: Buyer Stamp Duty (BSD) calculation

Purchase Price/
Market Value
BSD RateCalculation
First $180,0001%0.01*$180,000 = $1,800
Next $180,0002%0.02*$180,000 = $3,600
Subsequent $640,0003%0.03%*$640,000 = $19,200
Remaining $1,300,0004%0.04*$1,300,000 = $52,000
  Total BSD = $76,600

If your property has been classified as a residential unit, then the amount payable ranges from 1% to 4% depending on the type and size of the unit.

What is Stamp Duty?

Stamp duty is a tax that is collected for the Government of Singapore. It is calculated based on the purchase price of a property, and it becomes payable when you buy a property and then transfer it.

The formula for calculating stamp duty in Singapore is: if the purchase price of a property is $800,000, the BSD payable will be:

So for property price of $800,000, the BSD payable will be $18,600.


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When will you have to pay Stamp Duty?

The first thing to do is figure out how much Stamp Duty you will have to pay. This can be done by calculating the total purchase price of your condo unit and deducting the quota for each category of buyer.

Who pays Stamp Duty on a Condo Unit?

The seller of the property is usually the one to pay Stamp Duty. However, in this case, you are buying it from your future self. In other words, if you buy a condo unit before completing it (eg: purchase, start construction and then sell), then you need to pay Stamp Duty on that unit as well as the unit you previously purchased. For example, if you buy a condo unit and then build another one later on without selling the first one first, then you will be paying Stamp Duty twice on those two units.
When buying a property in Singapore, there are some cases where stamp duty can be avoided altogether. One example would be when your purchase price is below $150k and/or your purchase price is less than 50% of the fair market value (FMV). In addition, units built within 5 years of purchasing and units sized under 350 square feet also don’t attract any stamp duty fees.

Is it possible to get a 0% stamp duty concession on a condominium unit?

Stamp duty is calculated on the purchase price of a property. The current rate for stamp duty for a property in Singapore is 3-4%.
The good news is that there are some exemptions to stamp duty, and these will vary depending on where you purchase your property. For example, if you are buying a property within 500m of Changi Airport, then your stamp duty might be waived.

There may also be cases where you can buy a condominium unit without having to pay any stamp duty at all, unless it’s an executive condominium unit. This means the total stamp duty could be as low as 0%.
Another way to save money when purchasing a Condo unit is by getting that unit resale value increased by paying its developer an extra amount of money. This will entitle residents to enjoy discounts on their first year’s lease payment.
Stamp duty is calculated both ways: the transaction cost plus the value of the building itself. So if you want to save more, then buying an executive condominium unit doesn’t make much sense because you have to buy the building too – which usually costs more than just purchasing a given piece of land.

Conclusion

Stamp duty is a tax levied on real estate transactions in Singapore. Stamp duty is typically calculated as a percentage rate of the total purchase price of the property.
This is typically calculated on the total sale price of the property, including the real estate transfer fee, stamp duty and other applicable taxes.
One of the reasons that people tend to buy a condominium unit is that they are eligible for a 0% stamp duty concession when they purchase their unit. This means that the buyer pays no stamp duty, other than the stamp duty on the transfer fee.
If you are looking to buy a condominium unit, be sure to find out if you are eligible for a 0% stamp duty concession.

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